December 28, 2013
2014 calls for PRUDENCE
2013 is coming to an end. It started highly charged on issues surrounding the 13th General Election; which witnessed Barisan Nasional retaining their power for the next 5 years. Various promises were made. Sweeteners were sprinkled to hood the public into believing that a better future holds in the coming months and years.
Nevertheless, barely 6 months into regaining Putrajaya, all hopes of joy and dreams of the rakyat to enjoy their hard eared money have been shattered in the wake of escalated cost of living. The government has made their promises sour in taste by announcing various prices hikes of goods and services as the closure to the year.
The public by large are flabbergasted in the manner policies are being hammered through, that will take toll on their incomes directly.
In the name of subsidy rationalisation and strengthening fiscal position, Prime Minister Najib Tun Razak has not left any stone unturned in ‘punishing’ the people of Malaysia by upping prices on daily essentials. First it was the hike in fuel price by 20 sen. Well as usual his justification was that we have one of the lowest priced fuel in the region. So subsidising it heavily does not make sense.
Then the sugar subsidy was removed. Again a very unsubstantiated, flimsy and lame excuse was used. Apparently the number of diabetics are on the rise because the government is subsidising sugar, thus the need for the move. What a genius deduction made by a person who has pretty much lost touch with the reality indeed.
But Najib was still not too appeased with the savings as he felt that more needs to be done to ‘safeguard’ the interest of the public. Thus we are bracing a further rate hike on highway tolls and electricity in 2014.
And as icing, there is near confirmed possibility of hike in school bus and public transport fares. Taxis, buses, trains, and the LRT will all cost more in the coming year.A timely Christmas and New Year gift from Putrajaya for 2014.
As cumulative consequences and in definite terms, the overall cost of living will only spiral up as production of goods and services will also cost more. The entire supply chain will not be spared and eventually the cost will drop flat on the laps of the consumers.
The hardest hit will be the middle income group which is already in a limbo with the current economic situation. Wages have not seen significant changes in parallel to inflation. The power of each ringgit has shrunk in its capacity over the years. It is baffling as to what is defined as a high income nation in the eye of the Malaysian government when in actual sense the purchasing power does not improve with time.
Consumers will need to dig in deeper into their pockets come 2014. A chunk of their salaries will go to paying higher current bills for sustenance; thus what will be left for savings will demand sharp juggling skills.
With a gloomy outlook on the global economic front coming ahead next year, it will be a much tougher battle to handle.
With many drawing up their New Year’s resolutions for 2014, please do keep in mind that financial prudence is highly recommended to be on the top of the list. That little pay increment or bonus one may obtain should be spread thin and well to cover any other surprises that BN may further spring on us.